Numbers Don't Lie

“ Housing Glut Gives Buyers Upper Hand”. This was the headline of an article in the January 25, 2007 edition of the Wall Street Journal. Interesting. A market that was referred to as the “real estate boom” 15 months ago and a “cooling market” 8 months ago, is now described as a “housing glut”.

The article provided data for 28 major metropolitan areas, including Los Angeles, where the inventory of homes for sale increased by 59% in 2006. The most distressed markets are Miami and San Diego, and the cause is the massive condo glut. In San Diego, there are now “more than 10,000 condos available for sale in new building, projects under construction or properties being converted”. Condo prices declined by 15% to 20% in 2006, with the article stating “it’s hard to measure price changes because sellers often give incentives such as free upgrades or help with closing costs that aren’t reflected in the price.”

In the January 16, 2007 press release from Dataquick, the main source of real estate market data for California, Dataquick’s President is quoted as saying; “We are watching the San Diego market carefully, sales and price trends there have tended to lead the region.” With the 100 to 150 condos proposed for downtown Sierra Madre, you might say the cancer that is destroying the San Diego real estate market is attempting to metastasize and spread to our community.

Sierra Madre does not exist in a vacuum. Its small town character belies the fact that it is a component of Los Angeles County and the Southern California Region. However, as an independent entity, we have the power to prevent the real estate crisis that’s moving north from San Diego from entering our community.

During the real estate crash in the early 1990’s, several areas of Los Angeles were not seriously affected. Sierra Madre was one of them. Possibly the least affected area, however, was the Hollywood Hills. That came from two factors. First, the entertainment industry did not suffer from the financial losses that hit areas around military bases and defense related industries. Second, and more importantly, The Hollywood Hills were built out decades ago, and further large-scale development is impossible.

I research everything I write in my columns, thoroughly. And in all my work I have never found any data or expert opinion that would support an argument for high-density housing projects in our downtown. All these projects will do is degrade our quality of life, depress home values and hurt homeowners. And homeowners are the vast majority of residents in this community. However, I can easily see how these high-density housing projects would help downtown property owners, developers, and the local real estate agencies. So, would City Council members, Buchanan, Joffe, Mosca, and the rest of the clique supporting these projects please show all of us what they are basing their position on.